Implementation of Intellectual Property Rights Regime: The Justification Question
Patent (Second Amendment) Bill, 1999, introduced as an amendment to the Patent Act 1970 is with the Parliament waiting for its final consideration. This Bill is culmination of the exercise undertaken to fulfill the India's commitment to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), a component of the GATT 1994. The TRIPS negotiations gave rise to a heated debate during the Uruguay rounds of talks. While debating over the issue, the developed countries and developing countries found themselves on polar opposite sides. Back home, the Patent (Second Amendment) Bill ( hereafter Bill), a replica of TRIPS agreement, has raised lots of controversies both inside as well as outside the Parliament for quite some time now. Unfortunately even at this stage there is much confusion prevailing not only over the magnitude of welfare effects of the incoming regime but also the direction of these effects.
The need of developing countries like India for access to works protected by intellectual property has grown more severe in the present technology driven global economy. Intellectual property protection on the other hand is very important for the MNCs, based in the developed world, to enable them to exploit the hitherto unprotected markets. Given the overtly economic character of TRIPS rules and economic efficiency being the professed goal of the Agreement, economic-theoretic evaluation is the most natural choice for any plausible analysis of the Agreement as well as the Bill. One important question that we examine is whether economic theory provides a justification for enactment of Intellectual Property Rights ( IPRs). We present arguments showing that not only the incoming regime fails to satisfy the efficiency criterion, it is self-contradictory. If so,
* Department of Economics, Delhi School of Economics, University of Delhi.
Social Scientist, Vol. 30, Nos. 1 - 2, Jan.-Feb. 2002